HOW DO YOU PROCEED WHEN A SHAREHOLDER OF AN S.A. DIES?
When a shareholder of an S.A. dies (in the case of a company consisting of only two shareholders) the company is not dissolved. Since the deceased natural person is succeeded by the “undivided succession”.
In principle, it may happen that:
- the deceased shareholder is also chairman of the board of directors or a director
- the deceased shareholder is not a director
In the first case, it will depend on how the board of directors is organized: If it is a single-member board of directors and there is an alternate director (this requirement is mandatory when there is no receivership – art.258-LSC). The alternate director must be constituted at the registered office and draw up a board of directors minutes on the occasion of the death of the president and assume “in exercise of the position of president”. Until the next assembly resolves. The company has been left without an alternate director, but this is possible temporarily.
If the board of directors is plural, as long as there is a sufficient number of directors to make a quorum according to the bylaws. And therefore they can meet and resolve, the same procedure is followed. All the directors meet at the registered office (members and alternates) on the occasion of death. All of them assuming the immediately preceding position, in the order in which they have been elected at the time.
In both cases, this is possible because the board of directors (members and alternates) with a current mandate should be registered in accordance with article 60 in the Public Registry (IGJ).
In the case of companies that do not have alternate directors, as a result of having a receivership, and provided that the bylaws do not provide for any other form of appointment, the trustee must appoint a replacement until the next meeting, in accordance with the provisions of the last part of article 258, proceeding in the same way as in the cases indicated above.
If the deceased shareholder is not a director, the chairman of the board of directors or whoever replaces him. Should immediately convene a meeting of the board of directors. Or, in the case of a single-member board of directors, should be constituted immediately at the registered office. On the occasion of the death of the shareholder. In order to better provide, and by virtue of the provisions of the Civil and Commercial Code of the Nation. Art.2280, in its first paragraph. Which establishes that the heirs of the deceased continue in their rights and actions in an undivided manner. To summon them to the last domicile denounced by the shareholder in the company. In order to unify the legal status to exercise the right to vote in the meetings.
Thus, at the board meeting convened for this purpose, the heirs must prove their family relationship with the deceased shareholder through the relevant documentation, and unify legal status, that is, appoint one among them, to exercise the political rights of the deceased shareholder in the name and representation of the estate – until the succession is opened and the intervening judge – appoints a judicial representative.